HL Deb 29 July 1971 vol 323 cc631-8

3.38 p.m.


My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Aberdare.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clauses 1 to 6 agreed to.

Clause 7 [Amendment of qualification for unemployment benefit, sickness benefit and injury benefit]:


Before I call Amendment No. 1 I should point out to the Committee that if this Amendment is agreed to I cannot call Amendments Nos. 2 and 3.

BARONESS PHILLIPS moved Amendment No. 1: Page 8, line 23, leave out subsection (1).

The noble Baroness said: Bearing in mind that there is a great deal of business to be completed to-day, I will not take up the time of your Lordships too much, but I would tell the Committee that although there appears to be a large number of Amendments down to this Bill, in fact the number of points to be debated is very small—not small in quality, but small in number—and the Amendments are related. With permission, despite what the noble Lord, the Lord Chairman, has just said, I should like to discuss Amendments Nos. 1 and 2 together. They relate to a subsection of the clause which deals with unemployment and sickness benefit. Taking sickness benefit first. I would point out what the Minister in another place said when speaking on this clause. I believe that on Second Reading in this House the Minister also told your Lordships this. The Minister in another place stated: We have witnessed over the past years steady increase in the proportion of male workers covered to a greater or lesser degree by employers' sickness schemes, but of course they are not yet comprehensive "— and note this, my Lords— and as the hon. Member has said, they are of varying quality. That, I think, is very relevant to this clause.

I wonder whether I may refer again to the paper, General Problems of Low Pay. This deals with only three industries: contract cleaning, laundry and ancillary workers in the National Health Service. We see that these workers were interviewed concerning sickness benefit and asked what conditions obtained in those industries. We find that for men in the laundry industry 22 per cent. receive full pay for a month or more when they are sick, 23 per cent. sick pay but less than full pay for one month or more and 33 per cent. receive no sickness pay at all. There were 23 per cent. who said they"did not know ", but, my Lords, I suspect that one would know whether one received pay when sick, so I think we may safely assume that a proportion of those also did not have any sickness benefit.

When we look at the figures for workers in the National Health Service we find a slightly happier picture. There, 75 per cent. of the men would receive full pay for a month, but only 41 per cent. of the women would receive it. That is an interesting point. When we come to the women working in industry we find again that the percentages are different: 89 per cent., if working part-time, did not receive sickness pay, and in the laundry and dry cleaning trades 57 per cent. of the women full-time workers did not receive sickness pay.

I do not want to labour the point and I know that I may have selected something which is not typical, but I think it is all too easy to say that these figures are not typical. This Bill, as I see it, deals with the low-paid worker. As a professional, I have always been fortunate to have an adequate salary and to be fully protected by my employers in the event of sickness, but it is one of the ironies of life that if one is badly paid because one is badly educated, one invariably lives in poor housing, one's children are educated in old and neglected schools and one is, as a result, much more vulnerable to sickness, unemployment and all the other problems. So this will be the group who will be hit by any change which takes place through this Bill.

When we look at unemployment benefit, with 800,000 unemployed at the moment we realise that no small section of the population is concerned. This matter is of particular concern to those working in the building trade or the catering trades, people who, as we all know, are much subject to short-time working. To lose three days' benefit several times a year seems grossly unfair. Again, if one is at the lower end of the pay scale every major change in one's budget means an added difficulty. Recently I saw a suggestion that a Bill of this kind would attempt to deal with scroungers. I absolutely refute at this Box that the average worker is a scrounger. In my experience, both here and as a magistrate, I find that rogues and scroungers will find a way round any piece of legislation we introduce. We must always consider that we are dealing with ordinary people and that it is ordinary people who will feel the benefit or the disadvantage of any legislation which we introduce.

I have been told that if there are hardships there are always supplementary benefits. That is so, but this only means shifting the payment from one fund to another, which in the event means related benefits. I said on Second Reading that this is a mean Bill. I see nothing to cause me to change my opinion, and this is one of the worst clauses in the Bill. Very generously, we are giving the Government two opportunities here. By Amendment No. 1 we would take out subsection (1) and leave the situation as it is at the moment. Those concerned would be paid for the three waiting days. If, on the other hand, advantage is taken of Amendment No. 2, the introduction of the change will be postponed until January, 1976. Noble Lords may ask why this is suggested and I will give three reasons; there may be others. This would give the unions time to demand that all employers should provide a scheme to cover all workers for sickness, unemployment and injury and it would give employers time to accede to that demand. Secondly, the date suggested will be after the present Government have to go to the country, and I guess that they will be replaced by a different type of Administration. Thirdly, if we have entered the European Economic Community by that time there will be an opportunity for the Government of the day to prepare schemes in co-operation with the countries of the Six. I beg to move.

3.47 p.m.


I am very happy to try to answer the points made by the noble Baroness, Lady Phillips, although I shall have to depend largely on the arguments I put forward on Second Reading, because this is a major part of the Bill and I could not possibly accept her proposed Amendments. I went into this in some detail on Second Reading. I shall try to avoid going over all the, figures I gave then, but I ask to be excused if I cover some of the same ground.

The noble Baroness mentioned the provisions for social security in the E.E.C. and naturally both of us are interested in making comparisons. I think there is one comparison that should make us very thankful for our own scheme. That is that it is a national, comprehensive scheme and makes universal additions for all those who benefit under it As it is a national scheme, we must now allow it to ossify. We must review its workings from time to time and ensure that those who subscribe to it—employer, employee and taxpayer—as well as those who benefit, get the best value for their money. This, I suggest, will not only mean reviewing the administrative arrangements from time to time but also will entail fundamental changes in the scheme when we have to find new priorities. That is what we have done on this occasion, as I tried to explain on Second Reading. I suggest that we must not consider this Bill in isolation. It marches hand in hand with the National Insurance Act, recently passed in this House, which made substantial increases in benefits.

To mention just one improvement which was universally acceptable to your Lordships, there was the new invalidity benefit package. We should like to do more. We should like to increase the benefits and to bring in new selective benefits, but there is a limit to the financial resources available. One way of providing more money is by a careful review of existing benefits. It was as a result of that review that we put this particular benefit, the retrospective payment for the three waiting days, into the scales against other priorities. We came to the conclusion it was no longer justified. I should like to emphasise this, because it was not all that clear in our last discussion that this payment is never made now during the first three days. The whole point of the three waiting days is to disregard short isolated periods of absence. Payment is made retrospectively only if someone is absent for two weeks or more in a period of 13 weeks. This was useful and a good benefit when the scheme was introduced, but in terms of priority we feel that it is no longer justifiable. It may be that the noble Baroness does not agree with our priorities but that is the reason why we have taken this step.

I have already given some of the reasons why we have reached this judgment. To save a long catalogue, I would just list the changed circumstances to-day compared with those when the scheme was stated in 1948. Since then, there has been a four-fold increase in personal disposable income and an eight-fold increase in personal savings. National Insurance benefits have increased very substantially in real terms as well as in money terms. Thirdly, we now have earnings-related supplements to benefit which are payable from the third week off work, which is just about the same time that this payment was made. Fourthly, there are many more working wives, earning much higher wages. Fifthly, there has been a substantial growth in employers' sick pay schemes.

As our attention was drawn to this by the noble Baroness, may I repeat the figures? The coverage in the year 1961–62 was only 56.5 per cent. of all male employees but in April, 1970 employers' sick pay schemes covered over 72 per cent. For manual workers, the corresponding figure, while lower, was still nearly 65 per cent. of all full-time male employees aged 21 and over. These are the reasons why we consider that this particular benefit no longer has the same priority as others. It has nothing to do with scroungers. That is quite another point and has no relevance to our reasons. Times have changed and there are more urgent priorities for the £19 million that can be saved (at the present rates of benefit) and used in other directions, such as the invalidity benefit package I have mentioned.

The noble Baroness also spoke to Amendment No. 2 and here I could not accept that we should delay this change of priority. We have already committed (as it were) the money elsewhere in the invalidity benefit package and under the National Insurance Act. Naturally we want to do all we can to encourage employers to increase the number of sick pay schemes and I am sure that pressure will be put on them by the trade unions to do so, but this is a matter for voluntary negotiations. I hope that, as a result, more workers will be covered by these voluntary schemes. I regret that for these reasons I am unable to accept the Amendment.


While I should like to thank the Minister for his words, I confess that I did not expect him to accept either Amendment. I am eternally hopeful, however, and sometimes a Minister has a change of heart. I am interested in the figure which he gave of 65 per cent. of manual workers covered by sick pay schemes. That still leaves 35 per cent. not covered—a very large number of people. Though we talk in percentages, they mean millions of people. I suspect, though I have no way of checking this, that it is those on better pay who get the fringe benefits. I feel that it is rather like talking gaily about 2 per cent. unemployment being necessary. That is fine, if you do not happen to be part of the 2 per cent. I reject entirely the noble Lord's proposition about working wives. The fact that a wife happens to be working is no reason at all for not paying benefits. And I would point out that the Government are not giving the money, they are simply redistributing it in a slightly different way. However, having said that, I beg leave to withdraw my Amendment.


Before the noble Lord answers, if he can speak again, could I ask a question on discrimination? Apparently a man is discriminated against if he has a working wife. Are women discriminated against because they are married? I see that the percentage of women who get sick pay is very small.


There is no discrimination here at all. I am not quite sure to what the noble Baroness is referring.


The noble Lord has said that there is no discrimination if a man may not benefit if he has a working wife. That is discrimination against a man on certain grounds and I want to know why there are fewer women.


I never said anything of the sort. I do not think that the noble Baroness was listening. I was giving various reasons why, in the changed economic circumstances of today, with more money coming into the home and with better National Insurance benefits, we thought the priorities no longer justified the payment of benefit after two weeks of the money that would have been paid for the first three days' sickness. There is no discrimination at all.


I was not talking about the first three days' sickness but about sickness pay, about the figures which my noble friend gave.


I think that perhaps my noble friend is referring to the figures which I gave from General Problems of the Lower Paid and here we must absolve the Government, who are not actually concerned. I quoted this in aid and said that employers seem to give more benefit to men than to women. That is discrimination, but on this occasion we cannot expect the Minister to reply.


In other words. I was attending to every word the Minister said and I was correct.

Amendment, by leave, withdrawn.


Before the noble Lord the Chairman of Committees puts the next Amendment, it may he a convenient time to have a Statement and I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.